Clearco is set to lay off 125 employees, which amounts to approximately one-quarter of its team.
Co-founders Michele Romanow and Andrew D’Souza told Clearco employees about the cuts in an email on Friday morning. The email, shared with BetaKit, stated, “Today we have made the hard decision to reduce our workforce by 125 people and are considering strategic options for our international operations.”
The email added that “invites will go out shortly to those who are part of this reduction in force followed by meetings with team leads.”
Romanow and D’Souza cited the current macroeconomic environment as the reason for the layoffs, and called the move necessary in order to ensure Clearco is “able to support as many founders as possible,” and “to come out of this economic downturn a sustainable and profitable company.”
The announcement of the layoffs follow a tumultuous time for Clearco. The company has been quietly downsizing in recent months, as reported by The Logic, with multiple sources indicating to BetaKit that Clearco had made more layoffs than had it had initially claimed in June.
In June, Clearco made layoffs to its Ireland team — just three months after entering that market and announcing plans to hire 125 employees there. The company also shuttered a site in Israel. At the time, a Clearco spokesperson claimed the cuts were less than 10 percent of Clearco’s overall Dublin headcount. Since that time, the company has maintained that it has no need for mass layoffs — despite reports that it had been reducing its headcount more broadly.
Clearco also quietly increased the repayment fee for its loans, and reportedly been seeking to renegotiate agreements with some of its lenders in order to reduce the amount it pays for its borrowed capital — used to make its loans to startups.
The FinTech company, which has raised hundreds of millions of dollars in the last couple of years, both in equity and debt for its loans, is not the only company to be feeling the affects of the current economic environment. Shopify also made a similar call this week, letting go of 10 percent of its staff (around 1,000 employees). In his message to employees CEO Tobi Lütke cited having made a wrong bet on where the future of e-commerce.
Tech companies across the globe had been making similar staff reductions. Layoff tracking website Layoffs.fyi reports that 420 startups have let go of close to 6,000 employees so far this year.
FinTech and e-commerce companies have been especially hard hit. In Canada, crypto exchange Coinsquare recently laid off about 24 percent of its employees, and in June Wealthsimple cut approximately 13 percent or 159 of the 1,262 employees.